Business leaders in Dubai have requested the UAE’s Central Bank to review new regulations on lending, saying that current regulations discouraged investments and made accessing car loans difficult, Arabic daily Al Khaleej reported.
Participating in a meeting organised by the Dubai Chamber of Commerce and Industry (DCCI) at its headquarters, which also involved Central Bank officials, the union of traders also asked for clearer guidance on how to deal with Iranian firms in the context of UN sanctions.
Topics like encouraging investment and supporting real estate sectors and ways to promote export and re-export were also discussed during the meeting.
Acknowledging the fact that there are some banks that are reluctant to lend to certain business following the global financial crisis, Khalil Mohammed Sharif Al Foladhy, Chairman of the board of directors of the Central Bank, said the local banks are very stable and secure with a strong base of liquidity and “banks should take advantage of the situation an invest in promoting growth.”
Noting that the issue of lending is real and should be tackled, he assured the business community that the Central Bank is working on devising a mechanism to easing lending in the UAE.
Holding the business community partially responsible, he added: “The slowdown in lending was partially caused by low demand by businessmen, especially with the decline of investments in real estate sector, which accounts for the highest percentage of bank loans.”
During the meeting the business community also highlighted the need to ease credit facilities for the import-export sector, while also urging the governing bank to revisit the new 20 per cent down payment system for car loans.
They said at a time when people are facing a lack of cash forcing them to pay 20 per cent down payment to avail car loans is a bit harsh, calling upon the bank to reduce the down payment percentage.
The representatives of Central Bank in the meeting have promised to study the recommendations although they said that charging a 20 per cent down payment is a common practice across the region.